Soon after quitting Merrill Lynch to run wealth management at Morgan Stanley in 2006, James Gorman remarked: "You've got to be brutal by defining the bottom half of your organisation."

His stance was unusual in a sector renowned for its louche behaviour. It gave Gorman, a former McKinsey & Co senior partner, a chance to stand out as something special as he succeeded in doubling Morgan Stanley's margins by the end of last year.

John Mack has now given him the chance to do the same to Morgan's loss-making investment bank, in an era where hair shirts have become 'haute couture'.

Born in Melbourne, Australia, Gorman started his career as an attorney. He secured an MBA from Columbia University. At McKinsey he became a member of its financial services practice, advising clients in the securities, banking and asset management industry.

He joined Merrill Lynch in 2001, holding down a succession of executive positions, before realising that the wealth industry would provide him with an opportunity to build his reputation. He displayed a ruthless determination to build his bottom line in a sector where Merrill's commission-driven wealth advisers - known as the Thundering Herd - expected to get their own way. But Gorman plugged away, rewarding success and culling failure.

To the suprise of few, he made enemies along the way, and lost out in a brutal power battle with Robert McCann when Stan O'Neal was appointed chief executive of the bank, rescued by Bank of America a year ago. One former Merrill wealth adviser recalls: "Gorman was an effective operator. I rated him highly. Certainly more highly than McCann. But I suspect O'Neal saw him as a bit of threat."

Mack wasted no time picking up Gorman when he fell available, putting him in charge of Morgan's wealth business and sanctioning its merger with Citigroup's Smith Barney operation. Gorman also took on the management of Morgan's struggling asset management business. He became co-head of strategic plannning and co-president late in 2007. By the beginning of this year, he was being tipped as John Mack's successor and, this week, it came to pass.

The former Merrill adviser said: "Gorman is a renowned McKinsey networker . I suspect people like him are going to be increasingly seen as potential bank chief executives following the credit crunch."

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McKinsey's relentless focus on delivering productivity gains for clients make its past employees well suited for the current economic environment, where cost-cutting is a priority.

Another McKinseyite - Lord Adair Turner - chairman of the UK Financial Services Authority, is set to play a leading part in negotiating the terms of engagement for the world's banking industry following the credit crisis. Jane Fraser, who also worked at McKinsey, is chief executive of Citi Private Bank, the remaining part of Citigroup's wealth division that was not sold to Morgan Stanley.

McKinsey alumni also hold several posts in the Obama administration, including Diana Farrell, joint deputy director of the National Economic Council, and Karen Mills, head of the Small Business Administration.

One analyst said: "This move is John Mack's best for quite some while. It means he can glad hand his bankers, as chairman of the board, while Gorman gets on with the kind of process stuff Morgan Stanley badly needs." He added that Gorman was a straight talker, quite capable of delivering news of bonus cuts to bankers who normally feel they deserve more pay, rather than less.

In part, pay controls are set to become politically expedient. But Mack will be more concerned by the losses of $780m delivered by his investment bank in the first half of 2009. In contrast, the rest of the world's seven leading investment bank operations were in profit during the period, with Goldman's topping the table with $5.65bn, with the exception of UBS, the runt of the litter.

Ironically Phil Purcell, the former chief executive of Morgan Stanley that Mack replaced, was also an ex-McKinsey consultant. Purcell was defenstrated for making the bank too boring and downplaying investment banking, but the less risky approach he championed is once again in vogue.

Mack will always be haunted by the way he lifted Morgan Stanley's risk exposures during the credit boom. In handing his business back to a process man, he has finally accepted that the market is brutal in defining the bottom half of the global investment banking premier league table.